Have gas prices hit bottom?

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Wawa gas
The gas price last week at a Wawa in Bear, DE.

Gasoline prices rose two cents a gallon over the past week after the  owner of Delaware City Refining Co. reported that production would be reduced during a maintenance turnaround.

The maintenance was moved up, in part, due to market conditions, which include low crude oil prices and a power failure that occurred during blizzard conditions in late January.

The price at the pump  rose as much as  10 cents a gallon in northern Delaware on the news. Reuters reported that the refinery supplies about 15 percent of the gasoline on the East Coast. Gas prices did drop  slightly at some statoins after the initial spike.

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Newark remained the epicenter of low gas prices, with one independent station charging $1.64 a gallon.

Members of BJ’s Wholesale Club in New Castle may be seeing the lowest prices, with the GasBuddy website reporting a $1.62 a gallon figures.

In the region, Philadelphia-area gas prices averaged $2 a gallon; $1.76 in Delaware and $1.60 in southern New Jersey, AAA reported.

Meanwhile, the national average for a gallon of gasoline has spent 37 consecutive days below the $2 per gallon benchmark, Wilmington-based AAA Mid-Atlantic reported.

The combination of seasonal reductions in gasoline demand and the lower price for crude oil are likely to help keep prices low in the near term.

The national average price of $1.74 per gallon is discounted by six cents per gallon on the week, 26 cents per gallon  for  the month and 43 cents per gallon on the year.

At the close of Friday trading on the NYMEX,  West Texas Intermediate Crude  was down $2.73 to settle at $30.89 per barrel. Crude stocks topped 500 million barrels for the first time ever earlier in the week as market fundamentals continue to point to supply outpacing demand.

However, crude oil prices have been subject to speculation on whether the bottom has been reached.

The impact of the removal of the decades-old crude oil export ban is also a question regarding production and global oil supply.

“The imbalance between supply and demand and the resolution of distribution and refinery issues is contributing to falling prices at the pump,” said Jana L. Tidwell, manager of Public and Government Affairs for AAA Mid-Atlantic.  “Barring any major supply or distribution issues, and if the price of crude remains depressed, prices at the pump remain poised to continue lower heading into the spring maintenance season.”

Although the price of crude has fluctuated over the past week, daily price reductions at the pump are slowing down, suggesting that prices will soon be impacted by increased costs at refineries as they shut units for maintenance and begin producing the more expensive summer blend of gasoline, AAA reported.

Although the summer blend is not required to be sold until May 1, refineries typically begin making it at least a month ahead to build up supply, while tapering off production of the winter blend, AAA reported.

Meanwhile, the savings for consumers has been limited by the ability of  industries to pocket the savings while still keeping in place higher airline fares and fuel surcharges from past years.

Motorists can use the (AAA.com/fuelfinder)  to find the lowest price.

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